GM CEO shuffles managers, seeks culture change

AP News
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Posted: Dec 04, 2009 6:14 PM

When auto industry veteran Bob Lutz returned to General Motors in 2001 after 30 years with other companies, he quickly grew tired of GM's numbers-oriented bureaucracy, printing up post-it notes that asked, "Says Who?"

Lutz stuck his credo on walls and bulletin boards as he publicly challenged the lumbering corporate culture.

In announcing another sudden management overhaul on Friday, GM chairman and acting CEO Ed Whitacre Jr. was speaking Lutz's words when he told employees that the bureaucracy needs to end and they can take reasonable risks without fear of being fired.

"We want you to step up. We don't want any bureaucracy," Whitacre said in his folksy Texas drawl to about 800 GM workers. "We're not going to make it if you won't take a risk," he said in the address, which was broadcast to employees worldwide on the Internet.

Whitacre, 68, who has been frustrated with the pace of change, appointed the 77-year-old Lutz as a top adviser, creating an alliance of hard-charging veteran executives to lead the troubled company.

The former CEO of AT&T Inc., Whitacre heads a board that just pushed out CEO Fritz Henderson after only eight months in office.

In his 45-minute speech, Whitacre, reversed several changes that Henderson made, restoring the position of North American president and rejoining sales and marketing, which had been split in two.

Whitacre, wearing a charcoal pinstriped suit, paced across a stage, encouraging workers to make changes and get things done quickly. Several times he was self-deprecating, acknowledging that he knows little about cars and would need help from workers.

Whitacre made clear he would rely on Lutz, the company's legendary car guy, to craft GM's future and teach him the business. "Bob, with me as a pupil, you've got a tough job," Whitacre said.

Lutz, a 40-year industry veteran who has worked for major automakers across the globe, is known best for leading Chrysler's wild success in the late 1990s with the introduction of a new 300 luxury sedan and an aggressively designed Ram pickup truck.

But while his new job gives him Whitacre's ear, he loses responsibility for marketing, which he was granted when Henderson persuaded him to postpone retirement earlier this year.

"It could be his exit package," said Gerald Meyers, a former chairman of American Motors Corp. who now teaches at the University of Michigan. "You think of it in business terms, he's moved to a position where he isn't going to run anything. That's not too exciting."

Whitacre, saying he's sick of ideas sitting on desks "while we wrangle," elevated many of the company's younger executives. Among them were, Mark Reuss, 46, who for a short time ran engineering and was named president of North America Friday; and Susan Docherty, 47, the former sales chief, who was picked to head sales and marketing. Whitacre also named Nick Reilly president of GM's European operations, which includes the Opel and Vauxhall brands.

The changes came so fast, though, that Whitacre didn't even know how to pronounce the name of Karl-Friedrich Stracke, the man he appointed to head global engineering.

"If I butchered your name, I'm from Texas, you'll understand," Whitacre said. He also appeared to be meeting Denise Johnson, the new vice president of labor relations, for the first time when she approached the stage.

"I have to make I sure I know you, too," he said, reaching down to shake her hand.

Stephen Girsky, the only one of GM's 12 board members with automotive experience, also was named a special adviser to Whitacre.

During the address, Whitacre said he is open to suggestions and encouraged employees to ask questions and communicate.

But that's in contrast to the way he managed in building regional phone company Southwestern Bell into a giant that eventually acquired AT&T, according to analysts.

Dave Burstein, editor of the DSL Prime broadband industry newsletter, said that at AT&T, Whitacre brooked no disagreement about who was in charge.

"If you don't take orders, Whitacre doesn't want you," he said.

As he led the Texas-based Baby Bell on a buying spree, Whitacre usually replaced management teams of the acquired companies, Burstein said.

Whitacre has said he wants to speed up changes so the company boosts sales and market share to make money and repay government loans.

GM, which emerged from bankruptcy protection last summer, owes the U.S. government $52 billion and hopes to repay much of it with a public stock offering.

Lutz, in an e-mail on Friday, said he's seen no sign of Whitacre being autocratic or unwilling to listen, but he knows Whitacre will hold people accountable.

"He expects people to execute. Otherwise, he will replace them," Lutz said. "He's firm on big things, like organization and people selection, but not interested at all in detail."

The management changes emerged from a 3-to-4 hour session on Tuesday with senior leaders, Whitacre told the employees Friday. That task might have taken months to put together under GM's previously bureaucratic culture.

"I said we need to move fast," Whitaker said, "and three days is not bad, is it?"

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Ken Thomas reported from Washington. AP Auto Writer Dan Strumpf and AP Technology Writer Peter Svensson in New York contributed to this report.